THISDAY Model Portfolios Decline Further as Bears Dominate Market

The massive decline in prices of bellwether stocks that depressed the stock market to a four-month low last week impacted negatively on the THISDAY Model Portfolio (TMP). The TMP growth contracted from 40.5 per cent the previous week to 33.5 per cent last week as all the four constituent portfolios suffered significant decline.

However, market analysts were not surprised at the decline in the TMP given the fact that the stock market has remained bearish and posted decline for four consecutive weeks. The equities market fell by 2.8 per cent last week, bringing the year-to-date (YTD) growth to 3.7 per cent, a development that has been reflected in the performance of the TMP.

The TMP is an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), designed to enable leading stockbrokers and investment houses in the country share their trading skills and methodologies with ordinary investors. The investment houses involved in the project are Afrinvest Limited, FSDH Securities Limited, Capital Assets Limited, Meristem Limited and Lead Advisory Limited.

It is made up of five differ- ent portfolio types constructed individually in conjunction with five leading stockbroking firms in the country with different investment objectives.

Each partner stock broking houses constructed a portfolio of 10 stocks selected according to their individual best judgement and using their best and well tested stock selection and investment strategies. Each of them then

deployed an imaginary fund of N10 million to invest on the 10 stocks in whatever proportions they considered best.

But four of the stockbroking firms have been recording growth in their respective portfolios, while one has recorded instability in its performance. The four portfolios have maintained growth

YTD growth but that growth contracted last week.

For instance, Portfolio D, which remained with the highest growth stood at 48.5 per cent, a decline from 53.3 per cent the previous week. This portfolio’s value reduced from N15.328 million to N14.581 million, which still an improvement compared to its value of N10 million at the introduction of the portfolio.

In a similar vein, Portfolio C, which maintained its second position, fell from 46.3 per cent two weeks to 37 per cent last week. This implies that its value reduced from N14.634 million to N13.702 million last week.

Similarly, Portfolio B fell from 38.9 per cent to 32.2 per cent but maintained the third highest growth among the TMP. This implies that the N10 million deployed stood at N13.228 million as at last Friday, down from N13.899 million two weeks ago.

Portfolio A, which recorded the fourth highest gain, closed with 18.7 per cent, a decline from 23.5 per cent the previous week. This indicates that the N10 million deployed is now worth N11.869 million.

Despite the decline suffered by the portfolios, only one stock in Portfolio D, remains a negative performer. The only stock with negative performance has recorded 20.3 per cent decline. However, the highest gainer fell from 121.5 per cent to 117.7 per cent. The second highest gainer stood at 86.6 per cent, down from 112.6 per cent. Other gainers included: 77.5 per cent; 45.8 per cent; 37.5 per cent; 29.9 per cent; 21.8 per cent; and 14.6 per cent.